EUROPEAN UNION. Brussels, 30 June 2009 (OR. en) 2009/0010 (COD) PE-CONS 3659/09 ENER 188 ECOFIN 376 CODEC 729

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1 EUROPEAN UNION THE EUROPEAN PARLIAMT THE COUNCIL Brussels, 30 June 2009 (OR. en) 2009/0010 (COD) PE-CONS 3659/09 ER 188 ECOFIN 376 CODEC 729 LEGISLATIVE ACTS AND OTHER INSTRUMTS Subject: REGULATION OF THE EUROPEAN PARLIAMT AND OF THE COUNCIL establishing a programme to aid economic recovery by granting Community financial assistance to projects in the field of energy PE-CONS 3659/09 BE/cz

2 REGULATION (EC) No /2009 OF THE EUROPEAN PARLIAMT AND OF THE COUNCIL of establishing a programme to aid economic recovery by granting Community financial assistance to projects in the field of energy THE EUROPEAN PARLIAMT AND THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 156 and Article 175(1) thereof, Having regard to the proposal from the Commission, Having regard to the opinion of the European Economic and Social Committee 1, After consulting the Committee of the Regions, Acting in accordance with the procedure laid down in Article 251 of the Treaty 2, 1 2 Opinion of 13 May 2009 (not yet published in the Official Journal). Opinion of the European Parliament of 6 May 2009 (not yet published in the Official Journal) and Council Decision of... PE-CONS 3659/09 BE/cz 1

3 Whereas: (1) The European economy is facing a sharp downturn resulting from the financial crisis. Extraordinary and immediate efforts are needed to counter this serious and unprecedented economic situation. In order to restore confidence among market players, measures impacting on the economy need to be finalised without delay. (2) At the same time it is clear that the long-term strength and sustainability of the European economy depend on reshaping it to face the demands of energy security and the need to reduce greenhouse gas emissions. Increasing concerns about securing reliable gas supplies reinforce this conclusion. (3) In the light of these concerns, the European Council of 11 and 12 December 2008 endorsed in its conclusions the European Economic Recovery Plan (Recovery Plan), presented by the Commission on 26 November 2008, which sets out how Member States and the European Union can coordinate their policies and provide new stimulus to the European economy, targeting that stimulus to the Community's long-term objectives. (4) An important part of the Recovery Plan is the proposal to increase Community spending in defined strategic sectors, so as to address the lack of confidence among investors and to help develop the path to a stronger economy for the future. The European Council asked the Commission to present a list of specific projects, taking into account an adequate geographical balance, to reinforce investment in the development of, in particular, infrastructure projects. PE-CONS 3659/09 BE/cz 2

4 (5) For the Recovery Plan to be effective, it is vital to finance measures that rapidly address both the economic crisis and the Community's urgent energy needs. Nevertheless, the special programme established by this Regulation should in no way set a precedent for future co-financing rates in the field of infrastructure investments. (6) In order to have a tangible and substantial impact, those measures should be focussed on a few specific sectors in which action would make a clear contribution to the objectives of the security of energy supply and the reduction of greenhouse gas emissions; there exist large, mature projects capable of making efficient and effective use of significant amounts of financial assistance and of catalysing significant amounts of investment from other sources, including from the European Investment Bank; and action at European level would add value. The sectors of gas and electricity infrastructure, offshore wind energy and carbon capture and storage fulfil those criteria. The choice of those sectors reflects the particular circumstances of the Recovery Plan and should not call into question the high priority attached to energy efficiency and the promotion of energy from renewable sources, which were addressed in the Recovery Plan. PE-CONS 3659/09 BE/cz 3

5 (7) In the event that it is not possible to commit all funds by the end of 2010, the Commission has declared its intention, if appropriate, to propose, when reporting in 2010 on the implementation of this Regulation, measures allowing for the financing of projects consistent with the Recovery Plan, such as projects in the areas of energy efficiency and energy from renewable sources. (8) In the case of gas and electricity infrastructures, certain challenges have developed in recent years. The recent gas crises (winters 2006 and 2009) and the increase of oil prices until mid-2008 demonstrated Europe's vulnerability. Indigenous energy resources gas and oil are decreasing to the extent that Europe is increasingly dependent on imports for its energy supply. In this context, energy infrastructure will play a crucial role. (9) However, the current economic and financial crisis is affecting the implementation of energy infrastructure projects. Some important projects, including projects of Community interest, may face severe delays in implementation due to scarcity of funds. Urgent action to support investment in energy infrastructure is therefore appropriate. Given the significant time necessary to plan and then execute such projects, it is important that the Community invest in such infrastructure immediately so that it may, in particular, accelerate the development of projects of particular importance to the security of energy supply within the Community. This will be vital to ensure the Community's security of energy supply at competitive prices when the economy rebounds and global energy demand increases. PE-CONS 3659/09 BE/cz 4

6 (10) Among energy infrastructure projects, it is necessary to select those that are important to the operation of the internal energy market, to the security of energy supply and which also contribute to the recovery of the economy. (11) In the cases of carbon capture and storage and offshore wind energy in particular, this Regulation should build on the Strategic Energy Technology Plan for Europe, presented by the Commission on 22 November 2007, which called for a joint and strategic plan for energy research and innovation efforts consistent with EU energy policy goals, and a commitment to the establishment of six European Industrial Initiatives. The European Council of 16 October 2008 called in its conclusions on the Commission to significantly accelerate the implementation of the Strategic Energy Technology Plan for Europe. The programme initiates the funding for carbon capture and storage and offshore wind projects without prejudice to the future creation of the six industrial initiatives on energy demonstration projects as outlined by the Strategic Energy Technology Plan for Europe. (12) In order to have an immediate impact on the economic crisis, it is essential for this Regulation to list the projects that may receive immediate financial assistance, subject to conformity with criteria that ensure efficiency and effectiveness and to the limits set by the financial envelope. PE-CONS 3659/09 BE/cz 5

7 (13) In the case of gas and electricity infrastructure projects, a list should be established according to the project's contribution to the objectives of security and diversification of supply as identified in the Commission's Second Strategic Energy Review of 13 November 2008 and endorsed by the European Parliament in its resolution of 3 February 2009 and by the Council in its conclusions of 19 February Projects should be selected on the basis that they implement the priorities identified in that Review, have achieved a reasonable degree of maturity, and contribute to security and diversification of sources of energy and supplies; optimisation of the capacity of the network and the integration of the internal energy market, in particular concerning crossborder sections; development of the network to strengthen economic and social cohesion by reducing the isolation of the least favoured regions or islands of the Community; connection of renewable energy resources; safety, reliability and interoperability of interconnected networks; and solidarity among Member States. The implementation of those projects will require a commitment from national, regional and local authorities to accelerate administrative procedures and authorisations. For many projects, support will not be forthcoming within the timeframe set if this acceleration does not take place. PE-CONS 3659/09 BE/cz 6

8 (14) In the case of offshore wind energy, the list should contain projects that can be considered, on the basis of information gathered from stakeholders in the framework of the European Wind Energy Technology Platform, and from industrial and other sources, to be approved and ready for implementation; to be innovative, while building on well established concepts; to be capable of acceleration in response to a financial stimulus; to have a cross-border significance; to be of a large scale; and to be able to demonstrate how the results of technological advances will be disseminated effectively in the light of the objectives and structures endorsed by the Strategic Energy Technology Plan for Europe. Financial assistance should be directed towards those projects that are in a position to progress substantially with project development in 2009 and (15) In the case of carbon capture and storage, the list should be largely established on the basis of information gathered from stakeholders in the framework of the Fossil Fuel Forum, the Zero Emissions Fossil Fuel Power Plants Technology Platform and other sources. Financial assistance should be directed towards those projects that are in a position to progress substantially with project development in 2009 and Readiness should be assessed on the basis of the existence of a mature and feasible concept for the industrial installation, including its carbon capture component; the existence of a mature and feasible concept for the transport and storage of CO 2 ; and a clear commitment on the part of local authorities to support the project. Projects should also demonstrate how the results of technological advances will be disseminated effectively and how they will accelerate the achievement of the objectives laid down in the Strategic Energy Technology Plan for Europe. PE-CONS 3659/09 BE/cz 7

9 (16) It will be necessary to select among eligible proposals. Such selection should guarantee, inter alia, that no more than one carbon capture and storage proposal is supported in each Member State, in order to ensure the investigation of a wide range of geological storage conditions and to support the objective of encouraging economic recovery across Europe. (17) Community funding should not unduly distort competition or the functioning of the internal market, having regard in particular to the rules on third-party access and possible third party access exemptions. Any further national funds in addition to Community funding should take into account State aid rules. Regardless of its form, Community financial assistance should be granted in accordance with the provisions of Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities 1 (the Financial Regulation) and of Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities 2, except where the provisions of this Regulation explicitly depart from those rules. 1 2 OJ L 248, , p. 1. OJ L 357, , p. 1. PE-CONS 3659/09 BE/cz 8

10 (18) Due to the urgent need to address the economic crisis and the Community's pressing energy needs, this Regulation already contains detailed provisions concerning the arrangements for financial assistance, including a list of eligible projects. In addition, due to the urgent need for the stimulus, all legal commitments implementing the budgetary commitments made in 2009 and 2010 should be made before the end of (19) When actions financed under this Regulation are implemented, the financial interests of the Community should be protected by the application of preventive measures against fraud, corruption and any other illegal activities, by effective checks and by the recovery of amounts unduly paid and, if irregularities are detected, by effective, proportionate and dissuasive penalties, in accordance with Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European Communities financial interests 1, Council Regulation (Euratom, EC) No 2185/96 of 11 November 1996 concerning on-the-spot checks and inspections carried out by the Commission in order to protect the European Communities' financial interests against fraud and other irregularities 2 and with Regulation (EC) No 1073/1999 of the European Parliament and of the Council of 25 May 1999 concerning investigations conducted by the European Anti-Fraud Office (OLAF) OJ L 312, , p. 1. OJ L 292, , p. 2. OJ L 136, , p. 1. PE-CONS 3659/09 BE/cz 9

11 (20) Taking into account the nature of the issues in the sub-programmes, the Commission should be assisted by different committees for the selection of proposals retained for funding and the determination of the amount of funding to be granted under each sub-programme. (21) The measures necessary for the implementation of this Regulation should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission 1. (22) Since the objectives of this Regulation, namely to aid economic recovery within the Community, face the demands of energy security and reduce greenhouse gas emissions by increasing spending in defined strategic sectors, cannot be sufficiently achieved by the Member States, and can therefore, by reason of the scope of this Regulation and the nature of the sectors and projects selected, be better achieved at Community level, the Community may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those objectives. (23) Due to the urgent need to address the economic crisis and the Community's pressing energy needs, this Regulation should enter into force immediately after its publication, HAVE ADOPTED THIS REGULATION: 1 OJ L 184, , p. 23. PE-CONS 3659/09 BE/cz 10

12 CHAPTER I INTRODUCTORY PROVISIONS Article 1 Subject matter This Regulation establishes a financing instrument entitled the European Energy Programme for Recovery (the EEPR) for the development of projects in the field of energy in the Community which, by providing a financial stimulus, contribute to economic recovery, the security of energy supply and the reduction of greenhouse gas emissions. This Regulation establishes sub-programmes to advance those objectives in the fields of: (a) (b) (c) gas and electricity infrastructures; offshore wind energy; and carbon capture and storage. This Regulation identifies projects to be financed under each sub-programme and lays down criteria for identifying and implementing actions to realise these projects. PE-CONS 3659/09 BE/cz 11

13 Article 2 Definitions For the purposes of this Regulation, the following definitions shall apply: (a) "carbon capture and storage" means the capture of carbon dioxide (CO 2 ) from industrial installations, its transport to a storage site and its injection into a suitable underground geological formation for the purposes of permanent storage; (b) "eligible costs" has the same meaning as in Regulation (EC, Euratom) No 2342/2002; (c) "gas and electricity infrastructures" means: (i) (ii) (iii) all high-voltage lines, excluding those of distribution networks, and submarine links, provided that this infrastructure is used for interregional or international transmission or connection; high-pressure gas pipelines, excluding those of distribution networks; underground storage facilities connected to the high-pressure gas pipelines referred to in point (ii); PE-CONS 3659/09 BE/cz 12

14 (iv) (v) reception, storage and regasification facilities for liquefied natural gas (LNG); and any equipment or installations essential for the infrastructure referred to in points (i), (ii), (iii) or (iv) to operate properly, including protection, monitoring and control systems; (d) (e) (f) (g) "part of a project" means any activity that is independent financially, technically or over time and which contributes to the completion of a project; "investment phase" means the phase of a project during which construction takes place and capital costs are incurred; "offshore wind energy" means the electric power generated from turbine engines powered by wind and situated in the sea, whether near or far from the shore; "planning phase" means the phase of a project that precedes the investment phase, during which project implementation is prepared, and includes, where appropriate, feasibility assessment, preparatory and technical studies, obtaining licences and authorisations and incurring capital costs. PE-CONS 3659/09 BE/cz 13

15 Article 3 Budget 1. The financial envelope for the implementation of the EEPR for 2009 and 2010 shall be EUR , allocated as follows: (a) gas and electricity infrastructure projects: EUR ; (b) offshore wind energy projects: EUR ; (c) carbon capture and storage projects: EUR Individual legal commitments implementing the budgetary commitments made in 2009 and 2010 shall be made by 31 December PE-CONS 3659/09 BE/cz 14

16 CHAPTER II SUB-PROGRAMMES SECTION 1 GAS AND ELECTRICITY INFRASTRUCTURE PROJECTS Article 4 Objectives The Community shall promote gas and electricity infrastructure projects having the highest Community added value and contributing to the following objectives: (a) (b) (c) (d) (e) security and diversification of sources of energy, routes and supplies; the optimisation of the capacity of the energy network and the integration of the internal energy market, in particular concerning cross-border sections; the development of the network to strengthen economic and social cohesion by reducing the isolation of the least favoured regions or islands of the Community; the connection and integration of renewable energy resources; and the safety, reliability and interoperability of interconnected energy networks, including the ability to use multidirectional gas flows where necessary. PE-CONS 3659/09 BE/cz 15

17 Article 5 Priorities The EEPR shall serve urgently to adapt and develop energy networks of particular importance to the Community in support of the operation of the internal energy market and, in particular, to increase interconnection capacity, security and diversification of supply and to overcome environmental, technical and financial obstacles. Special Community support is necessary to develop energy networks more intensively and to accelerate their construction, notably where the diversity of routes and sources of supply is low. Article 6 Granting of Community financial assistance 1. Financial assistance under the EEPR (EEPR assistance) for gas and electricity infrastructure projects shall be awarded for actions that implement the projects listed in Part A of the Annex or parts of such projects, and which contribute to the objectives laid down in Article The Commission shall call for proposals to identify the actions referred to in paragraph 1 and shall assess the compliance of those proposals with the eligibility criteria laid down in Article 7 and the selection and award criteria laid down in Article The Commission shall inform the beneficiaries of any EEPR assistance to be granted. PE-CONS 3659/09 BE/cz 16

18 Article 7 Eligibility 1. Proposals shall be eligible for EEPR assistance only if they implement the projects listed in Part A of the Annex, do not exceed the maximum amount of EERP assistance laid down therein and fulfil the selection and award criteria under Article Proposals may be submitted: (a) (b) by one or several Member States, acting jointly; with the agreement of all Member States directly concerned by the project in question: (i) (ii) (iii) by one or several public or private undertakings or bodies acting jointly; by one or several international organisations acting jointly; or by a joint undertaking. 3. Proposals submitted by natural persons shall not be eligible. PE-CONS 3659/09 BE/cz 17

19 Article 8 Selection and award criteria 1. In assessing the proposals received under the call for proposals referred to in Article 6(2), the Commission shall apply the following selection criteria: (a) (b) the soundness and technical adequacy of the approach; the soundness of the financial package for the full investment phase of the action. 2. In assessing the proposals received under the call for proposals referred to in Article 6(2), the Commission shall apply the following award criteria: (a) (b) (c) (d) (e) (f) maturity, defined as reaching the investment stage, and incurring substantial capital expenditure by the end of 2010; the extent to which lack of access to finance is delaying the implementation of the action; the extent to which EEPR assistance will stimulate public and private finance; socio-economic impacts; environmental impacts; the contribution to the continuity and interoperability of the energy network, and to the optimisation of its capacity; PE-CONS 3659/09 BE/cz 18

20 (g) (h) the contribution to the improvement of service quality, safety and security; the contribution to the creation of a well-integrated energy market. Article 9 Funding conditions 1. EEPR assistance shall contribute to project-related expenditure for the implementation of the project, incurred by the beneficiaries or by third parties responsible for the implementation of a project. 2. EEPR assistance shall not exceed 50 % of the eligible costs. Article 10 Instruments 1. Following the call for proposals referred to in Article 6(2), the Commission, acting in accordance with the management procedure referred to in Article 26(2), shall select the proposals to receive EEPR assistance and determine the amount of EEPR assistance to be granted. The Commission shall specify the conditions and methods for the implementation of the proposals. 2. EEPR assistance shall be granted on the basis of Commission decisions. PE-CONS 3659/09 BE/cz 19

21 Article 11 Member States' financial responsibilities 1. Member States shall undertake the technical monitoring and financial control of projects in close cooperation with the Commission and shall certify the amount and the conformity with this Regulation of the expenditure incurred in respect of projects or parts of projects. Member States may request the participation of the Commission during on-the-spot checks. 2. Member States shall inform the Commission of the measures taken under paragraph 1 and, in particular, shall supply a description of the control, management and monitoring systems established to ensure that projects are successfully completed. SECTION 2 OFFSHORE WIND PROJECTS Article 12 Granting of EEPR assistance 1. EEPR assistance for offshore wind projects shall be awarded following a call for proposals limited to the actions that implement the projects listed in Part B of the Annex. PE-CONS 3659/09 BE/cz 20

22 2. The Commission shall call for proposals to identify the actions referred to in paragraph 1 and shall assess the compliance of these proposals with the eligibility criteria laid down in Article 13 and the selection and award criteria laid down in Article The Commission shall inform the beneficiaries of any EEPR assistance to be granted. Article 13 Eligibility 1. Proposals shall be eligible for EEPR assistance only if they implement the projects listed in Part B of the Annex, do not exceed the maximum amount of EEPR assistance laid down therein and fulfil the selection and award criteria under Article 14. Those projects shall be led by a commercial undertaking. 2. Proposals may be submitted by one or several undertakings, acting jointly. 3. Proposals submitted by natural persons shall not be eligible. PE-CONS 3659/09 BE/cz 21

23 Article 14 Selection and award criteria 1. In assessing the proposals received under the call for proposals referred to in Article 12(1), the Commission shall apply the following selection criteria: (a) (b) the soundness and technical adequacy of the approach; the soundness of the financial package for the full investment phase of the project. 2. In assessing the proposals received under the call for proposals referred to in Article 12(1), the Commission shall apply the following award criteria: (a) (b) (c) maturity, defined as reaching the investment stage, and incurring substantial capital expenditure by the end of 2010; the extent to which lack of access to finance is delaying the implementation of the action; the extent to which the project improves or increases the scale of installations and infrastructures that are already under construction, or are in the planning phase; PE-CONS 3659/09 BE/cz 22

24 (d) the extent to which the project includes the construction of full-size and industrial-scale installations and infrastructures, and addresses in particular the following matters: (i) (ii) (iii) (iv) (v) (vi) the balancing of the variability of wind electricity through integrative systems; the existence of large-scale storage systems; the management of wind farms as virtual power plants (more than 1 GW); the existence of turbines placed further from the shore or in deeper waters (20 to 50 m) than is currently standard; novel sub-structure designs; or processes for assembly, installation, operation and decommissioning and testing of these processes in life-size projects; (e) (f) (g) the innovative features of the project and the extent to which it will demonstrate the implementation of such features; the impact of the project and its contribution to the Community's offshore wind grid system, including its replication potential; the commitment demonstrated by the beneficiaries to disseminate to other European operators the results of technological advances made by the project in a manner compatible with Community law and in particular with the objectives and structures outlined in the Strategic Energy Technology Plan for Europe. PE-CONS 3659/09 BE/cz 23

25 Article 15 Funding conditions 1. EEPR assistance shall contribute to project-related expenditure for the implementation of the project. 2. EEPR assistance shall not exceed 50 % of the eligible costs. Article 16 Instruments 1. Following the call for proposals referred to in Article 12(1), the Commission, acting in accordance with the management procedure referred to in Article 26(2), shall select the proposals to receive EEPR assistance and determine the amount of funding to be granted. The Commission shall specify the conditions and methods for the implementation of the proposals. 2. EEPR assistance shall be granted on the basis of grant agreements. PE-CONS 3659/09 BE/cz 24

26 SECTION 3 CARBON CAPTURE AND STORAGE PROJECTS Article 17 Granting of EEPR assistance 1. EEPR assistance for carbon capture and storage projects shall be awarded to actions that implement the projects listed in Part C of the Annex. 2. The Commission shall call for proposals to identify the actions referred to in paragraph 1 of this Article and shall assess the compliance of the proposals with the eligibility criteria laid down in Article 18 and the selection and award criteria laid down in Article If several proposals from projects located in the same Member State comply with the eligibility criteria laid down in Article 18 and the selection criteria laid down in Article 19(1), the Commission shall select for EEPR assistance, on the basis of the award criteria in Article 19(2), no more than one proposal per Member State among those proposals. 4. The Commission shall inform the beneficiaries of any EEPR assistance to be granted. PE-CONS 3659/09 BE/cz 25

27 Article 18 Eligibility 1. Proposals shall be eligible for EEPR assistance only if they implement the projects listed in Part C of the Annex, fulfil the selection and award criteria under Article 19 and the following conditions: (a) (b) (c) the projects demonstrate that they have the ability to capture at least 80 % of CO 2 in industrial installations and to transport and geologically store this CO 2 safely underground; in power installations, CO 2 capture is demonstrated on an installation of at least 250 MW electrical output or equivalent; project promoters make a binding declaration that the generic knowledge generated by the demonstration plant will be made available to the wider industry and to the Commission to contribute to the Strategic Energy Technology Plan for Europe. 2. Proposals shall be submitted by one or several undertakings, acting jointly. 3. Proposals submitted by natural persons shall not be eligible. PE-CONS 3659/09 BE/cz 26

28 Article 19 Selection and award criteria 1. In assessing the proposals received under the call for proposals referred to in Article 17(2), the Commission shall apply the following selection criteria: (a) (b) (c) (d) the soundness and technical adequacy of the approach; maturity, defined as reaching the investment stage, which includes exploration and development of storage options, and incurring substantial investment-related expenditure for the project by the end of 2010; the soundness of the financial package for the full investment phase of the project; identification of all necessary permits required for construction and operation of the project at the proposed site(s) and the existence of a strategy to secure those permits. 2. In assessing the proposals received under the call for proposals referred to in Article 17(2), the Commission shall apply the following award criteria: (a) (b) the extent to which lack of access to finance is delaying the implementation of the action; requested funding per tonne of CO 2 to be abated in the first five years of operation of the project; PE-CONS 3659/09 BE/cz 27

29 (c) (d) the complexity of the project and level of innovation of the overall installation including other accompanying research activities and the commitment demonstrated by the beneficiaries to disseminate to other European operators the results of the technological advances made by the project in a manner compatible with Community law and in particular with the objectives and structures outlined in the Strategic Energy Technology Plan for Europe; the soundness and adequacy of the management plan including, in relation to the scientific, engineering and technical information and data contained therein, demonstration of readiness of the proposed concept to achieve operation of the project by 31 December Article 20 Funding conditions 1. EEPR assistance shall contribute only to project-related expenditure for the implementation of the project which is attributable to carbon capture, transport and storage, taking account of possible operating benefits. 2. EEPR assistance shall not exceed 80 % of total eligible investment costs. PE-CONS 3659/09 BE/cz 28

30 Article 21 Instruments 1. Following the call for proposals referred to in Article 17(2), the Commission, acting in accordance with the management procedure referred to in Article 26(2), shall select the proposals to receive EEPR assistance and determine the amount of EEPR assistance to be granted. The Commission shall specify the conditions and methods for the implementation of the proposals. 2. EEPR assistance shall be granted on the basis of grant agreements. CHAPTER III COMMON PROVISIONS Article 22 Other EEPR assistance and instruments 1. A part of the Community assistance for the projects listed in the Annex may be granted through a contribution to an appropriate instrument under the resources of the European Investment Bank. That contribution shall not exceed EUR PE-CONS 3659/09 BE/cz 29

31 2. The Community exposure to the loan guarantee instrument or other financing instrument, including management fees and other eligible costs, shall be limited to the amount of the Community contribution to that instrument and there shall be no further liability on the general budget of the European Union. 3. The Commission, acting in accordance with the management procedure referred to in Article 26(2), shall decide on the amount of EEPR assistance to be granted to that instrument. The Commission and the European Investment Bank shall conclude a memorandum of understanding specifying the conditions and the methods for the implementation of that decision. Article 23 Programming and implementing arrangements 1. Calls for proposals shall be directly launched by the Commission on the basis of budgetary availabilities referred to in Article 3(1) and the eligibility, selection and award criteria set out in Chapter II. 2. EEPR assistance shall cover only project-related expenditure incurred by the beneficiaries and, as regards projects under Article 9, also by third parties responsible for the implementation of a project. Expenditure may be eligible from the date referred to in Article VAT shall not be an eligible cost, except for non-refundable VAT. PE-CONS 3659/09 BE/cz 30

32 4. Projects and actions financed under this Regulation shall be carried out in accordance with Community law and shall take into account any relevant Community policies, in particular those relating to competition including the applicable state aid rules, protection of the environment, health, sustainable development and public procurement. Article 24 Member States' general responsibilities Within the sphere of their responsibility, Member States shall make every effort to implement the projects which receive EEPR assistance, notably through efficient administrative authorisation, licensing and certification procedures. Article 25 Protection of the European Communities' financial interests 1. The Commission shall ensure that, when actions financed under this Regulation are implemented, the financial interests of the Community are protected by the application of preventive measures against fraud, corruption and any other illegal activities, by effective checks and by the recovery of amounts unduly paid and, if irregularities are detected, by effective, proportionate and dissuasive penalties, in accordance with Regulation (EC, Euratom) No 2988/95, Regulation (Euratom, EC) No 2185/96 and with Regulation (EC) No 1073/1999. PE-CONS 3659/09 BE/cz 31

33 2. For the Community actions financed under this Regulation, the notion of irregularity referred to in Article 1(2) of Regulation (EC, Euratom) No 2988/95 shall mean any infringement of a provision of Community law or any breach of a contractual obligation resulting from an act or omission by an economic operator, which has, or would have, the effect of prejudicing the general budget of the European Union or budgets managed by it, by an unjustified item of expenditure. 3. All implementing measures resulting from this Regulation shall provide, in particular, for supervision and financial control by the Commission or any representative authorised by it, and by audits by the European Court of Auditors, including, if necessary, on-the-spot audits. CHAPTER IV IMPLEMTING AND FINAL PROVISIONS Article 26 Committees 1. The Commission shall be assisted by the following committees: (a) for gas and electricity infrastructure projects, the committee established by Article 15 of Regulation (EC) No 680/2007 of the European Parliament and of the Council of 20 June 2007 laying down general rules for the granting of Community financial aid in the field of the trans-european transport and energy networks 1 ; 1 OJ L 162, , p. 1. PE-CONS 3659/09 BE/cz 32

34 (b) (c) for offshore wind projects, the committee established by Article 8 of Council Decision 2006/971/EC of 19 December 2006 concerning the Specific Programme Cooperation implementing the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007 to 2013) 1 ; for carbon capture and storage projects, the committee established by Article 8 of Decision 2006/971/EC. 2. Where reference is made to this paragraph, Articles 4 and 7 of Decision 1999/468/EC shall apply, having regard to the provisions of Article 8 thereof. The period laid down in Article 4(3) of Decision 1999/468/EC shall be set at one month. Article 27 Evaluation 1. The Commission shall carry out an evaluation of the EEPR by 31 December 2011 in order to assess its contribution to the effective use made of the appropriations. 1 OJ L 400, , p. 86. PE-CONS 3659/09 BE/cz 33

35 2. The Commission may request a beneficiary Member State to provide a specific evaluation of projects financed under Section 1 of Chapter II of this Regulation or, where appropriate, to supply it with the information and assistance required to undertake an evaluation of such projects. 3. The Commission shall present to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions an evaluation report on the results achieved by the EEPR. Article 28 Information to the European Parliament and to the Council The Commission shall monitor the implementation of this Regulation. It shall, each year, on presentation of the preliminary draft budget, present a report to the European Parliament and to the Council on the implementation of the EEPR. If the report identifies serious risks in implementing the priority projects, the Commission shall recommend measures to offset those risks, and shall, where appropriate and consistent with the Recovery Plan, make additional proposals for such projects. PE-CONS 3659/09 BE/cz 34

36 Article 29 Entry into force This Regulation shall enter into force on the day following its publication in the Official Journal of the European Union. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at, For the European Parliament The President For the Council The President PE-CONS 3659/09 BE/cz 35

37 ANNEX Eligible projects A. Gas and Electricity infrastructure projects 1. Gas interconnectors Project Location of projects supported Envisaged Community contribution (EUR million) Southern Gas Corridor NABUCCO Austria, Hungary, Bulgaria, Germany, Romania 200 ITGI Poseidon Italy, Greece 100 Baltic interconnection Skanled/Baltic pipe Poland, Denmark, Sweden 150 LNG network Liquefied Natural Gas terminal at Polish coast at port of Świnoujście Poland 80 PE-CONS 3659/09 BE/cz 1 ANNEX

38 Central and South East Europe Slovakia-Hungary Interconnector (Veľký Krtíš Vecsés) Slovakia, Hungary 30 Gas transmission system in Slovenia between the Austrian Border to Ljubljana (excluding the section Rogatec-Kidričevo) Slovenia 40 Interconnection Bulgaria-Greece(Stara Zagora Dimitrovgrad-Komotini) Romania-Hungary gas interconnector Bulgaria, Greece Romania, Hungary Expansion of Gas Storage Capacity in the Czech hub Infrastructure and equipment to permit reverse gas flow in the event of short term supply disruption Slovakia-Poland interconnection Czech Republic Austria, Bulgaria, Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Poland, Portugal, Romania, Slovakia Slovakia, Poland Hungary-Croatia interconnection Bulgaria-Romania interconnection Hungary Bulgaria, Romania PE-CONS 3659/09 BE/cz 2 ANNEX

39 Mediterranean Reinforcement of FR gas network on the Africa-Spain-France axis France 200 GALSI (Gazoduc Algérie-Italie) Gas Interconnection Western Axis Larrau Branch Italy Spain North Sea area Germany-Belgium-United Kingdom pipeline France-Belgium connection Belgium France, Belgium TOTAL PE-CONS 3659/09 BE/cz 3 ANNEX

40 2. Electricity interconnectors Project Location of projects supported Envisaged Community contribution (EUR million) Baltic interconnection Estlink-2 Estonia, Finland 100 Interconnection Sweden- Baltic States, and strengthening of the grid in Baltic States Sweden, Latvia, Lithuania 175 Central and South East Europe Halle/Saale Schweinfurt Wien-Győr Germany Austria, Hungary Mediterranean Portugal-Spain interconnection reinforcement Interconnection France-Spain (Baixas Sta Llogaia) New 380 kv AC submarine cable between Sicily Continental Italy (Sorgente Rizziconi) Portugal France, Spain Italy North Sea area 500 MW Ireland/Wales interconnector (Meath-Deeside) Ireland, United Kingdom 110 Electricity interconnection Malta-Italy Malta/Italy 20 TOTAL 910 PE-CONS 3659/09 BE/cz 4 ANNEX

41 3. Small island projects Small isolated island initiatives Cyprus 10 Malta 5 TOTAL 15 B. Offshore wind projects Project Capacity Location of projects supported Envisaged Community contribution (EUR million) 1. Grid integration of offshore wind energy 1.1. Baltic Kriegers Flak I, II, III Building on projects under development. Financing aimed at ensuring extra cost for securing a joint interconnection solution. 1,5 GW Denmark, Sweden, Germany, Poland North sea grid Modular development of offshore grid, demonstration of virtual offshore power plant and integration in the existing onshore grid system. 1 GW United Kingdom, Netherlands, Germany, Ireland, Denmark, Belgium, France, Luxembourg 165 PE-CONS 3659/09 BE/cz 5 ANNEX

42 2. New turbines, structures and components, optimisation of manufacturing capacities 2.1. Borkum West II Bard 1 Nordsee Ost Global Tech I 1,6 GW Germany 200 New generation of multi-megawatt size turbines (5-7 MW) and innovative structures, situated far from shore (up to 100 km) in deeper waters (up to 40 m) Aberdeen offshore wind farm (European testing centre) 0,25 GW United Kingdom 40 Building on project presently under development Testing of multi-mw turbines. Development of innovative structures and substructures including optimisation of manufacturing capacities of offshore wind energy production equipment. An increase in size of 100 MW can be envisaged Thornton Bank 90 MW Belgium 10 Building on project presently under development. Learning from the Downvind project (cofinanced through FP6). Upscaling the Downvind installations turbines (5 MW size) in deep waters ( up to 30 m) with low visual impact (up to 30 km). TOTAL 565 PE-CONS 3659/09 BE/cz 6 ANNEX

43 C. Carbon capture and storage projects Project Name/ Envisaged Fuel Capacity Capture Storage Location Community Technique Concept contribution (EUR million) Huerth Germany 180 Coal 450 MW IGCC Saline Aquifer Jaenschwalde Coal 500 MW Oxyfuel Oil/Gas fields Eemshaven Netherlands 180 Coal MW IGCC Oil/Gas fields Rotterdam Coal MW PC Oil/Gas fields Rotterdam Coal 800 MW PC Oil/Gas fields Bełchatów Poland 180 Coal 858 MW PC Saline Aquifer Compostilla (León) Spain 180 Coal 500 MW Oxyfuel Saline Aquifer PE-CONS 3659/09 BE/cz 7 ANNEX

44 Kingsnorth United 180 Coal 800 MW PC Oil/Gas fields Kingdom Longannet Coal MW PC Saline Aquifer Tilbury Coal MW PC Oil/Gas fields Hatfield (Yorkshire) Coal 900 MW IGCC Oil/Gas fields Porto Tolle Italy 100 Coal 660 MW PC Industrial carbon capture project Florange France 50 Transport of CO 2 from industrial installation (steel plant) to underground storage (saline aquifer) TOTAL PE-CONS 3659/09 BE/cz 8 ANNEX